The following explanations are meant as a starting place.
Go to your experienced and trusted professionals for more information and to see if something is right for your situation.
If you don’t have a professional already, get referrals from people you trust. You can check out certified professionals with your state agencies. Such as, attorney’s with your State Bar, insurance agents and brokers with your state Insurance Commissionaire, etc.
Professionals you may want to have:
- Tax Accountant or CPA
- Estate Planner – Your Tax Account, CPA or an Attorney. Beware of people posing as professional Estate Planners. It has become a popular field in resent years.
- Insurance Agent/Broker
- Financial / Investment Advisor
Attorney for Wills or Trusts
Here are a few explanations of terms we hear all the time but might not really know what they mean or are:
Dow Jones Industrial Average: 30 of the largest and most widely held public companies in the United States created by Charles Dow in 1896.(editor of the WSJ)
Standard & Poor’s (S&P): Standard & Poor’s also known as S&P is the world’s foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. They supply investors with the independent benchmarks they need to feel more confident about their investment and financial decisions.
S&P 500: All of the stocks in the index are those of large publicly held companies and trade on the two largest US stock markets, the New York Stock Exchange and NASDAQ. After the Dow Jones Industrial Average, the S&P 500 is the most widely watched index of large-cap US stocks. It is considered to be a bellwether for the US economy and is a component of the Index of Leading Indicators and some times used as a measure to indicate the overall health of the US stock market.
NASDAQ: The National Association of Securities Dealers Automated Quotations or better known as NASDAQ is an American stock market. It is the largest electronic screen-based equity securities trading market in the United States. With approximately 3,200 companies, it lists more companies and on average trades more shares per day than any other U.S. market
Bull Market: is when buyers consistently outnumber sellers.
Bear Market: is when sellers consistently outnumber buyers.
Recession: A recession is negative economic growth (Gross Domestic Product or GDP) for two or more consecutive quarters in a year.
A prolonged Recession is called an Economic Depression.
"A recession is when your neighbor loses his job; a depression is when you lose your job."
The Market: Two ways to invest:
1) Own - Stocks, Real Estate, Real Assets, Real Estate Investment Trust/REIT’s-(A company dedicated to owning and, in most cases, operating income-producing real estate, such as apartments, shopping centers, and offices), etc
- pros - unlimited upside potential
- cons - you can lose your entire investment
2) Loan - bonds, CD's, notes
- pros -fixed return on investment, if insured you cannot lose your principle
- cons - unless your investment is insured you can lose both your principle and interest. Fixed return on investment no compounding.
Bond - Long-term promissory note for money borrowed by a firm from investors. Here is a partial list of bonds.
•Bearer bond - No record of ownership exists. Possession shows proof of ownership.
•Registered bond - The owner's name is recorded and interest payments are sent directly to the owner.
•Callable bonds - Refers to the ability to pay off a debt obligation prior to its maturity at the option of the issuer of debt.
•Convertible bonds - Debt instruments that can be exchanged for shares of common stock or an equity interest in the company.
•Debentures - Bonds that are not secured by the assets of a firm.
•Mortgage bond - A bond that is secured by a lien against the property of the firm.
•"Zero Coupon" Bonds - A special kind of debt instrument where the interest payments are not made on a regular basis but instead are "accumulated" and paid at the date of bond or debt maturity.
•Municipal bonds - Known as "munis", Municipal bonds are debt obligations issued by states, cities, counties and other governmental entities to raise money to build schools, highways, hospitals and sewer systems, as well as many other projects for the public good. Not all municipal bonds offer income exempt from both federal and state taxes. There is an entirely separate market of municipal issues that are taxable at the federal level, but still offer a state—and often local—tax exemption on interest paid to residents of the state of issuance. Most of this booklet refers to munis which are free of federal taxes
Certificate of Deposit or CD is a time deposit, a financial product commonly offered to consumers by banks, thrift institutions, and credit unions.
Such CDs are similar to savings accounts in that they are insured and thus virtually risk-free; they are "money in the bank" (CDs are insured by the FDIC for banks or by the NCUA for credit unions). They are different from savings accounts in that the CD has a specific, fixed term (often three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.
Using the market:
- Setting realistic goals
- Having realistic expectations
- Clear plan to meet your goals: For Example: How much will I have when I retire? When can I retire? When will I be able to afford my dream home? How much do I need to save per month/year to _________(insert year)? This is why I suggest working with a reputable financial advisor.
Q: How do you find a reputable financial advisor?
A: Ask your tax professional, your estate attorney or someone you consider to be financially savvy for a referral. If still in doubt look them up on NASD.com to find out if they have a clean record.
Abusing the Market:
Day trading: rapid buying and selling often times several times a day the same security in order to "beat" the market. This is done with stocks, bonds and even mutual funds. This is not unlike treating the stock market like you own private Las Vegas. Just like in Las Vegas even the pros get stung.
Why save for retirement? When you put money aside into a pretax retirement plan you are saving money before the IRS gets their cut. This allows your money to grow tax deferred and compound at a much faster rate than if you were paying taxes along the way. In addition, with most pre-tax retirement plans every dollar you put aside is subtracted dollar for dollar from your taxable income up to set contribution limits. This money grows tax deferred until you decide to pull money out at age 59 1/2 or until the IRS Requires you to take a Minimum Distribution at age 70 1/2. (aka RMD)
Types of Retirement Funds:
401K: A section 401(k) plan is a type of tax-qualified deferred compensation plan in which an employee can elect to have the employer contribute a portion of his or her cash wages to the plan on a pre–tax basis. These deferred wages (commonly referred to as elective deferrals) are not subject to income tax withholding at the time of deferral, and they are not reflected on your Form 1040 (PDF) since they were not included in the taxable wages on your Form W-2 (PDF). However, they are included as wages subject to social security, Medicare, and federal unemployment taxes.
The amount that an employee may elect to defer to a 401(k) plan is limited. Therefore, your elective contributions may be limited based on the terms of your 401(k) plan.
Distributions from a 401(k) plan may qualify for optional lump–sum distribution treatment or rollover treatment as long as they meet the respective requirements.
Many 401(k) plans allow employees to make a hardship withdrawal because of immediate and heavy financial needs. Generally, hardship distributions from a 401(k) plan are limited to the amount of the employee's elective deferrals only, and do not include any income earned on the deferred amounts. Hardship distributions are not treated as eligible rollover distributions.
Distributions received before age 59 1/2 are subject to an early distribution penalty of 10% additional tax unless an exception applies..
Roth IRA: A Roth IRA is an Individual Retirement Account that provides tax-free growth. Like a deductible IRA, a Roth IRA gives you the advantage of getting taxed only once, rather than twice (or more) as with a regularly-taxed investment account.
Here is a summary of how it works:
Regularly-Taxed Account -
-You pay income tax, and then make your contribution with post-tax dollars.
-Your principal may be subject to taxes on dividends and capital gains as it grows.
-You pay capital gains tax on your gain at withdrawal.
Deductible IRA –
-You get a tax deduction, essentially letting you deposit pre-tax dollars.
-Your principal grows tax-free.
-You pay income tax on the entire amount of your withdrawal.
Roth IRA –
-You pay income tax, and then make your contribution with post-tax dollars.
-Your principal grows tax-free.
-You pay no further taxes on withdrawal.
SEP IRA: The SEP IRA is a retirement plan designed to benefit self employed individuals and small business owners. Sole proprietorships, S and C corporations, partnerships and LLCs qualify.
SEP IRA contribution limits:
In 2007 a SEP IRA has a contribution limit of $45,000 ($44,000 in 2006). Contributions to a SEP IRA are generally 100% tax deductible and investment earnings in a SEP IRA grow taxed deferred. Withdrawals after age 59 1/2 are taxed as ordinary income. Withdrawals prior to age 59 1/2 may incur a 10% IRS penalty as well as income taxes.
A SEP IRA has broad appeal due to its high annual contribution limits, completely discretionary and flexible annual contributions and minimal administration. SEP IRA plans can be established by a one person business or by a business owner with employees.
-Most frequently a SEP IRA is established by a business owner without employees and is discussed in detail below.
-In special situations a SEP IRA may be an ideal retirement plan for a business owner with employees.
SEP IRA for a self employed business owner without employees: The calculation of how much can be contributed to a SEP IRA is dependent on whether your business is a corporation and you receive a W-2 as compensation or if you are taxed as a sole proprietorship and receive compensation as personal income.
KEOGH Plan: A Keogh plan, sometimes known as a HR10 plan, was designed with the small business owner in mind. First enacted in 1963, this tax deferred retirement savings fund is available for the owner or owners of an unincorporated business and its employees. Since the contributions are deducted from the gross income, one benefit of the plan is a reduction in pre-tax income. Other benefits of the Keogh plan include contributions that are tax deferred until withdrawn, deferred interest income, certain lump sum benefits which are eligible for 10-year averaging, and contribution limits higher than those of IRAs.
As with all retirement savings plans, the Keogh plan has early withdrawal penalties if the participant is more than 5% owner, and payments must begin by April 1 of the year the participant turns 70. Withdrawals from the plan cannot begin until the participant is 59 years of age and retired.
Annuities: An annuity is a contract between you (the purchaser or owner) and an insurance company. In its simplest form, you pay money to an annuity issuer, and the issuer then pays the principal and earnings back to you or to a named beneficiary. Annuities are generally used to provide income in retirement.
The biggest advantage of an annuity is that your money grows tax deferred until you withdraw it. The tradeoff is that if you take your money out before age 59½, you'll usually have to pay a 10 percent early withdrawal penalty to the IRS.
Most life insurance companies sell annuities. You pay the insurance company a sum of money, either all at once or incrementally. The type of annuity you own determines whether your money earns a fixed amount or an amount that depends on the equities in which the annuity is invested. At a designated time chosen by you, known as the maturity date, the insurance company generally begins to send you regular distributions from the annuity's account. Or, you may be able to withdraw the money over time or in one lump sum.
There are many different kinds of annuities. Four of the most common are the following:
•Single premium immediate annuity: You pay the insurance company a lump sum now and begin to receive withdrawal distributions in approximately one month and for a period of time you specify. The amount you receive will vary according to the length of time the payments are to last and whether anyone will receive the remaining balance at your death. Your money grows at a fixed interest rate, set each year by the insurance company.
•Single premium deferred annuity: You pay the insurance company a lump sum now and defer receiving withdrawals until later. The amount of those distributions will depend on the value of your account at the time your payments begin, the length of time the payments are to last, and whether anyone will receive the remaining balance at your death. Your money grows at a fixed interest rate, set each year by the insurance company.
•Annual premium deferred annuity: You send money to the insurance company usually monthly, quarterly, or annually. Your money earns a fixed interest rate, set each year by the insurance company, and you defer your withdrawals to a later date.
•Variable annuity: This type of contract is a vehicle for equity investments. You can do a one-time deposit or contribute throughout the life of the contract. You have choices as to how your money is invested in an offering of mutual funds, and you may invest conservatively or aggressively. The growth of your account value will vary, depending on your choice of investments.
Life Insurance: Of the many different types of life insurance available to consumers, term life insurance is generally regarded as the most inexpensive of the lot. In general, a life insurance policy pays a monetary benefit to the named beneficiary upon the death of the insured. Popular types of insurance include: whole life, variable life, and term life. While part of the premium in a whole life or variable life insurance policy goes into an investment fund, no part of the premium in a term life insurance policy is used for investment purposes. In short, the premiums in a term policy pay for the insurance.
Whole life insurance , or Whole of Life Assurance, refers to a policy that pays a lump sum on death or, in some cases, the earlier diagnosis of a critical illness whenever it occurs provided the contract is kept in force through the required payments being made.
The level of payout can vary from a fixed sum to one that is wholly dependent on investment performance on what remains after mortality costs and other expenses are deducted.
The level of premium payable may be a single, fixed periodic (e.g. monthly), or a periodic payment that may be reviewed subject to the underlying investment performance and sometimes changes in mortality cost.
Some policies will permit a range of flexibility allowing the maximizing of potential payout over a set period (such as ten years). Once this period is over and the insured individual or individuals are older the cover can be continued for an increased premium or the cover reduced (or somewhere in between limits). At any time the target benefit can be set for life. These policies are useful, for example, to those who want increased cover while they have dependent children and then want to reduce cover to last their life. An advantage of this over choosing a term policy and waiting until later to replace it with a Whole Life contract is that the individual is underwritten for life and are not restricted or prevented in future cover should they ever have a serious illness such as cancer.
Term Life policies are by far the cheapest form of insurance--at least in the beginning. For instance, a 30-year-old, non-smoking male, may pay $2,500.00 a year for a whole life policy with a death benefit of $250,000.00. However, the same policy in term form may only cost $300.00 per year. However, the whole life policy premium never increases over the years and also carries a cash build-up which can be used or borrowed at any time. The premiums on the term policy will increase as the insured grows older. For instance, when the 30-year-old male has his 70th birthday, his annual premiums for that same term policy may be $12,000.00 per year, instead of the paltry $300.00 when the policy was first ordered.
Many consumers prefer term insurance to provide their families with the security needed, and then use the additional funds they would have paid into a whole life or variable fund to make investments of their own choosing. Accordingly, they too are acquiring life insurance and using funds for investment purposes (IRA, college fund, second home savings), but they're simply using their funds in a different way, a manner that suits their personal needs.
As with most insurance plans, with a term life plan the insured will still have to undergo a basic physical exam conducted by a nurse (including blood work) to make certain they are insurable. The policy will remain in effect for as long as the premiums are paid. Term policies come in many varieties. However, the most popular models are annual, 7-year, and 10-year policies. Annual term policies carry a premium that increases slightly each year, while 7-year and 10-year term policies carry premiums that remain the same for 7 or 10 year periods at a time.
Disability Insurance: A policy that pays a portion of the insured’s income in the event he or she becomes ill or is injured and can no longer work temporarily or a permanent total disability. Long-term disability insurance is provided with coverage equal to sixty percent (60%) of the gross salary when combined with social security and other benefits.
Liability Insurance: There are different types of liability insurance, including general liability, which works in much the same way as auto liability insurance, but covers businesses. General liability protects a company from third party claims. Aside from general liability, there is also D & O liability, employer liability, and professional liability insurance.
D & O liability stands for "directors and officers" liability and is intended to cover the acts or omissions of those in the director or officer position. An entire company should not be held liable for the statements, actions, failure to act, or other mistakes that are the responsibility of an officer or director.
Employer liability is also known as worker's comp, and it is a mandatory form of liability insurance coverage that all businesses must carry. While it sounds like it is intended to protect the employee, which it does to some degree, it is actually protection for the employer in case of injury, job related illness, or other damages for which the employee might sue the company.
Professional liability is similar to malpractice insurance, although the coverage may not be as comprehensive as some malpractice policies in different fields. The purpose for professional liability insurance is to protect those seen as professionals or "experts" in a given field, who may not be protected by general liability due to their expertise. When one is seen as a professional, he is held to a higher standard and is therefore often considered to hold greater liability towards his clients. Consequently, he needs more coverage than general liability insurance offers.
The simplest definition of liability insurance is insurance which protects a person or entity from claims initiated by another party.
Supplemental Insurance: The purpose of supplemental insurance is simple...it fills the gaps other insurance policies leave open. For example, many employer-provided benefits only provide essential life insurance protection and are not designed to cover all your needs.
If your lifestyle has recently changed and you've had a baby...purchased a new or larger mortgage...or now have children entering college...it's especially important to update your family's financial protection by adding supplemental coverage.
Inflation is another reason you may need supplemental coverage. Over time, inflation can substantially reduce the purchasing power of your insurance dollar.
Short Term Disability: Short term disability coverage provides wage replacement to individuals who experience wage loss due to a disability. STD coverage lasts for up to one year.
Long Term Disability: Provides a reasonable replacement of monthly earnings to insureds that become disabled for extended periods of time due to accident or sickness.
Long Term Care:
-Non acute hospital care, for chronic conditions (eg nursing homes, psychiatric institutions, geriatrics, etc.).
-This insurance pays for chronic health conditions, such as physical incapacity or mental impairment, treated in a setting other than an acute care hospital.
- Insurance that provides financial protection for persons who become unable to care for themselves because of a chronic illness, disability, or cognitive impairment, such as Alzheimer's disease.
Simple interest:
- Interest paid on the principle (initial amount invested) is not added to the principle.
- The interest paid on the amount you invest is paid out to you and not added to the investment/principle.
Example: You invest $1,000 for 10 years at 10% interest annually (yearly). At the end of each year you would be paid $100 interest, the $100 would not be added to the amount invested. At the end of 10 year you would have the original investment of $1,000 plus a total of $1,000 interest paid over 10 years.
Year 1 Investment total: $1,000 Interest earned and paid at end of year 1: $100
Year 2 Investment total: $1,000 Interest earned and paid at end of year 2: $100
Year 3 Investment total: $1,000 Interest earned and paid at end of year 3: $100
Year 4 Investment total: $1,000 Interest earned and paid at end of year 4: $100
Year 5 Investment total: $1,000 Interest earned and paid at end of year 5: $100
Year 6 Investment total: $1,000 Interest earned and paid at end of year 6: $100
Year 7 Investment total: $1,000 Interest earned and paid at end of year 7: $100
Year 8 Investment total: $1,000 Interest earned and paid at end of year 8: $100
Year 9 Investment total: $1,000 Interest earned and paid at end of year 9: $100
Year 10 Investment total: $1,000 Interest earned and paid at end of year 10:$100
After 10 years your $1,000 investment is now worth $1,000.00 and you have $100 of interest paid each year.
Compounding Interest: Here are few explanations …
-Interest that accrues when earnings for a specific period are added to principal; thus interest for the following period is computed on the principal plus accumulated interest.
-A method of interest calculation where, in each period, interest is calculated on both the principal and interest previously accrued.
-When your money makes money and the money you make on your money is making money too. Good when you are investing, not so good when you are paying interest on credit card debt because now you are paying interest on the interest the credit card companies are charging you.
-Compound interest means that each time interest is paid, it is added to or compounded into the principal and thereafter also earns interest.
-When you borrow money from a bank, you pay interest. Interest is really a fee charged for borrowing the money, it is a percentage charged on the principle amount for a period of a year - usually.
-If you want to know how much interest you will earn on your investment or if you want to know how much you will pay above the cost of the principal amount on a loan or mortgage, you will need to understand how compound interest works.
* Compound interest is paid on the original principal and on the accumulated past interest .
For example, a new deposit balance is estimated each day for daily compounding. Common compounding periods are daily, monthly, quarterly, annually and continuously. The more frequent the compounding, the higher the effective rate of interest.
Example for Compound Interest on a annual basis:
Year 1 Investment total: $1,000 Interest earned at end of year 1: $100
Year 2 Investment total: $1,100 (initial investment plus interest eared) interest earned at end of year 2: $110
Year 3 Investment total: $1,210 Interested earned at end of year 3: $121
Year 4 Investment total: $1,331 Interested earned at end of year 4: $133.10
Year 5 Investment total: $1,464.10 Interested earned at end of year 5: $146.41
Year 6 Investment total: $1,610.51 Interested earned at end of year 6: $161.05
Year 7 Investment total: $1,771.56 Interested earned at end of year 7: $213.16
Year 8 Investment total: $1,948.72 Interested earned at end of year 8: $177.16
Year 9 Investment total: $2,143.59 Interested earned at end of year 9: $194.87
Year 10 Investment total: $2357.95 Interested earned at end of year 10: $214.36
After 10 years your initial investment of $1,000 would be worth $2,593.74
Want to do the math yourself … see formula under Sources at the end of this document.
Estate Planning: Estate planning is a process. It involves people—your family, other individuals and, in many cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. And it addresses your future needs in case you ever become unable to care for yourself.
Through estate planning, you can determine:
•How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
•When and under what circumstances it makes sense to distribute your assets during your lifetime.
•How and to whom your assets will be distributed after your death.
•How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.
Many people mistakenly think that estate planning only involves the writing of a will. Estate planning, however, can also involve financial, tax, medical and business planning. A will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.
Who needs estate planning?
You do—whether your estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself.
If your estate is small, you may simply focus on who will receive your assets after your death, and who should manage your estate, pay your last debts and handle the distribution of your assets.
If your estate is large, your lawyer will also discuss various ways of preserving your assets for your beneficiaries and of reducing or postponing the amount of estate tax which otherwise might be payable after your death.
If you fail to plan ahead, a judge will simply appoint someone to handle your assets and personal care. And your assets will be distributed to your heirs according to a set of rules known as intestate succession.
Contrary to popular myth, everything does not automatically go to the state if you die without a will. Your relatives, no matter how remote, and, in some cases, the relatives of your spouse will have priority in inheritance ahead of the state.
Still, they may not be your choice of heirs; an estate plan gives you much greater control over who will inherit your assets after your death.
Trust – why do we need them: What is a revocable living trust?
It is a legal document that can, in some cases, partially substitute for a will. With a revocable living trust (also known as a revocable inter vivos trust or grantor trust), your assets are put into the trust, administered for your benefit during your lifetime and transferred to your beneficiaries when you die—all without the need for court involvement.
Most people name themselves as the trustee in charge of managing their living trust’s assets. By naming yourself as trustee, you can remain in control of the assets during your lifetime. In addition, you can revoke or change any terms of the trust at any time as long as you are still competent. (The terms of the trust become irrevocable when you die.)
In your trust agreement, you will also name a successor trustee (a person or institution) who will take over as the trustee and manage the trust’s assets if you should ever become unable to do so. Your successor trustee would also take over the management and distribution of your assets when you die.
A living trust does not, however, remove all need for a will. Generally, you would still need a will—known as a pour over will—to cover any assets that have not been transferred to the trust.
You should consult with a qualified estate planning lawyer to assist you in the preparation of a living trust, your will and other estate planning documents. Also, keep in mind that your choice of trustees is extremely important. That trustee’s management of your living trust assets will not be automatically subject to direct court supervision.
Who should be my executor or trustee?
That is your decision. You could name your spouse or domestic partner as your executor or trustee. Or you might choose an adult child, another relative, a family friend, a business associate or a professional fiduciary such as a bank. Your executor or trustee does not need any special training. What is most important is that your chosen executor or trustee is organized, prudent, responsible and honest.
While the executor of a will is subject to direct court supervision and the trustee of a living trust is not, they serve almost identical functions. Both are responsible for ensuring that your written instructions are followed.
One difference is that the trustee of your living trust may assume responsibilities under the trust agreement while you are still living (if you ever become unable or unwilling to continue serving as trustee yourself).
Discuss your choice of an executor or trustee with your estate planning lawyer. There are many issues to consider. For example, will the appointment of one of your adult children hurt his or her relationship with any other siblings? What conflicts of interest would be created if you name a business associate or partner as your executor or trustee? And will the person named as executor or successor trustee have the time, organizational ability and experience to do the job effectively?
When does estate planning involve tax planning?
Estate taxes are imposed upon estates that have a net value of $2 million or more. That amount will increase to $3.5 million in 2009. In 2010, the estate tax will disappear completely.
Then, unless Congress passes an extension, the exemption will revert back to $1 million in 2011. For estates that approach or exceed these amounts, significant estate taxes can be saved by proper estate planning, usually before your death or, for couples, before one of you dies.
Keep in mind that tax laws often change. And estate planning for tax purposes must take into account not only estate taxes, but also income, capital gains, gift, property and generation-skipping taxes as well. Qualified legal advice about taxes and current tax law should be obtained from a competent lawyer during the estate planning process.
Does the way in which I hold title make a difference?
Yes. The nature of your assets and how you hold title to those assets is a critical factor in the estate planning process. Before you take title (or change title) to an asset, you should understand the tax and other consequences of any proposed change. Your estate planning lawyer will be able to advise you.
•Community property and separate property. If you are married or a registered domestic partner, assets earned by either you or your spouse or domestic partner while married or in the partnership and while a resident of California are community property. (Note: Earned income in domestic partnerships, however, may not be treated as community property for federal income tax purposes.)
As a married individual or registered domestic partner, you may continue to own certain separate property as well—property which you owned prior to the marriage or domestic partnership. A gift or inheritance received during the marriage or partnership would be considered separate property as well.
Separate property can be converted to community property (and vice versa) by a written agreement (it must conform with California law) signed by both spouses.
However, taking such a step can have significant tax and other consequences. Make sure that you understand such consequences before making any such change.
•Tenants-in-common. If you own property as tenants in common and one co-tenant (co-owner) dies, that co-tenant’s interest in the property would pass to the beneficiary named in his or her will. This would apply to co-tenants who are married or in a domestic partnership as well as to those who are single.
•Joint tenancy with right of survivorship. Co-owners (married or not) of a property can also hold title as joint tenants with right of survivorship. If one tenant were to die in such a situation, the property would simply pass to the surviving joint tenant without being affected by the deceased person’s will. .
•Community property with right of survivorship. If you are married or in a registered domestic partnership, you and your spouse or partner could also hold title to property as community property with right of survivorship.
Then, if your spouse or domestic partner were to die, the property would pass to you without being affected by the deceased person’s will.
Married couples and registered domestic partners also have the option of jointly holding title to property as community property. In such a situation, if one spouse or partner were to die, his or her interest would be distributed according to the instructions in his or her will.
Who should help me with my estate planning documents? •Can I do it myself? Yes. It is possible for a person to do his or her own estate planning with forms or books obtained at a stationery store or bookstore or from the State Bar. At the very least, a review of such forms can be helpful in preparing you for estate planning. If you review such materials and have any unanswered questions, however, you should seek professional help.
•Do I need a professional’s help? It depends. If you do seek advice, keep in mind that wills and trusts are legal documents that should only be prepared by a qualified lawyer. Many other professionals and business representatives, however, may become involved in the estate planning process. For example, certified public accountants, life insurance salespersons, bank trust officers, financial planners, personnel managers and pension consultants often participate in the estate planning process. Within their areas of expertise, these professionals can assist you in planning your estate.
The State Bar urges you, however, to seek advice only from professionals who are qualified to give estate planning advice. Many professionals must be licensed by the state.
Ask the professional about his or her qualifications. And ask yourself whether the advisor might have an underlying financial incentive to sell you a particular investment, such as an annuity or life insurance policy. Such a financial incentive could bias that professional’s advice.
Unfortunately, some sellers of dubious financial products gain the confidence and private financial information of their victims by posing as providers of estate or trust planning services.
Will – why do we need them: A will is a traditional legal document which:
•Names individuals (or charitable organizations) who will receive your assets after your death, either by outright gift or in a trust.
•Nominates an executor who will be appointed and supervised by the probate court to manage your estate; pay your debts, expenses and taxes; and distribute your estate according to the instructions in your will.
•Nominates guardians for your minor children.
Most assets in your name alone at your death will be subject to your will. Some exceptions include securities accounts and bank accounts that have designated beneficiaries, life insurance policies, IRAs and other tax-deferred retirement plans, and some annuities.
Such assets would pass directly to the beneficiaries and would not be included in your will.
In addition, certain co-owned assets would pass directly to the surviving co-owner regardless of any instructions in your will. And assets that have been transferred to a revocable living trust would be distributed through the trust—not your will.
What Does a Will Do?
A will is a legal document, drafted and executed in accordance with state law, which becomes irrevocable at your death. In your will, you can name:
•Your beneficiaries. These are family members, friends, a domestic partner, or charitable organizations who will receive your assets as you direct. You may provide for specific gifts of such items as jewelry or a specific sum of money to named beneficiaries. You should also provide for the distribution of the residue of your estate - that is, your remaining assets (they do not need to be specified) which are not specifically given to individuals or organizations in your will.
•A guardian for your minor children. You may nominate a person who will have the responsibility to care for your child if you and your spouse die before the child attains 18 years of age. You may also name a guardian - who may or may not be the same person - to be responsible for management of assets given to a minor child, until the child attains 18 years of age.
•An executor. This person or institution of your choice, named in your will and appointed by the probate court, collects and manages your assets, pays your debts and expenses and any taxes that might be due, and then, in a manner approved by the court, distributes your assets to your beneficiaries in accordance with the provisions of your will. Your executor plays a very important role with significant responsibilities.
It can be a time-consuming job. You should choose your executor carefully. A will is a part of your “estate plan.”
Does a Will Cover Everything I Own?
No. Generally speaking, your will affects only those assets which are in your name alone at your death. Some assets which are not affected by your will include:
•Life insurance. The cash proceeds from an insurance policy on your life are paid to whomever you have designated as beneficiary of the policy in a form filed with the insurance company Ñ no matter who the beneficiaries under your will may be.
•Retirement plans. Assets held in retirement plans, such as a 401(k) or an IRA, are transferred to whomever you have named as beneficiary in the plan documents.
•Assets owned as a joint tenant. Assets such as real estate, automobiles, bank accounts and other property held in joint tenancy will pass to the surviving joint tenant upon your death, not in accordance with any directions in your will.
•“Transfer on death” or “pay on death.” Securities and brokerage accounts may be registered or held with beneficiaries named on the security or account. Title is held in the name of the owner and the names of the beneficiaries are preceded by the words “transfer on death” or “TOD.” Other assets, such as bank accounts and U.S. savings bonds, may be held in a similar form using the owner’s name and the beneficiaries’ names preceded by the words “paid on death” or “POD.”
•“Community property with right of survivorship.” Married couples or registered domestic partners may hold title to their community property in their names as “community property with right of survivorship.” Property held in that manner at the death of the first spouse or domestic partner is not affected by that spouse’s will, but passes instead to the surviving spouse or domestic partner.
•Living trusts. Assets held in a revocable living trust at your death are distributed pursuant to the provisions of that trust document. A living trust allows for the management of your assets during your lifetime and the transfer of those assets pursuant to the terms of the trust without a court-supervised probate proceeding. The State Bar has published a pamphlet entitled Do I Need a Living Trust? which provides more detailed information about living trusts. (See #1 for information on ordering pamphlets.)
•Your spouse’s or domestic partner’s half of community property. In California, any assets acquired by you and your spouse or registered domestic partner from earnings during your marriage or domestic partnership are community property.
You and your spouse or registered domestic partner own equal shares of those assets. Your will, therefore, affects only your half of the community property, not your spouse’s or domestic partner’s.
Assets that either of you owned at the date of the marriage or registered domestic partnership, together with gifts and inheritances given to just one of you during the marriage or domestic partnership, are that individual’s separate property. Your will affects all of your separate property held in your name alone.
Even if your entire estate consists of property held in joint tenancy, a life insurance policy and a retirement plan, you should still consider making a will.
If the other joint tenant dies before you do, then the property held in joint tenancy will be in your name alone and subject to your will. If named beneficiaries die before you do, the assets subject to a beneficiary designation may be payable to your estate.
You may unexpectedly be entitled to a bonus, a prize, a refund, or may receive an unexpected inheritance which would then be subject to your will as well. If you have minor children, the nomination of a guardian of their person and estate is a very important reason for making a will.
What Happens If I Don't Have a Will?
If you die without a will (also referred to as intestate), state law will determine the beneficiaries of your estate. Contrary to popular myth, if you die without a will, everything does not automatically go to the state.
If you are married or have established a registered domestic partnership, your spouse or domestic partner will receive all of your community property. Your spouse or domestic partner also will receive part of your separate property, and the rest of your separate property will be distributed to your children or grandchildren, parents, sisters, brothers, nieces, nephews or other close relatives.
If you are not married or in a registered domestic partnership, your assets will be distributed to your children or grandchildren, if you have any - or to your parents, sisters, brothers, nieces, nephews or other relatives.
If your spouse or domestic partner died before you, his or her relatives may also be entitled to some or all of your estate. Friends, a non-registered domestic partner or your favorite charities will receive nothing if you die without a will.
Who Should Know About My Will?
Other than the lawyer who writes a will for you, no one needs to know what your will says. But the location of your original will should be known by your executor and other close friends or relatives.
Your will should be kept in a safe place such as your safe deposit box, your lawyer’s safe, or a locked, fireproof box at your residence.
What Other Planning Should I Do?
•List of assets and debts. Making a list of your assets and keeping it in a place known to your executor or other family members is of great help to them when you are not able to share that information with them. List your bank accounts, safe deposit boxes, stocks and bonds, real estate, and other assets. Also list the names and addresses of anyone to whom you owe money.
•Durable power of attorney for property management. In this document, you appoint another individual (the attorney-in-fact) to make property management decisions on your behalf if you are incapacitated. The attorney-in-fact manages your assets and must do so in a prudent manner accountable to you and solely in your best interests.
•Advance health care directive / durable power of attorney for health care. This document allows the person named as attorney-in-fact to make health care decisions for you when you can no longer make them for yourself. It may also contain statements of wishes concerning such matters as life sustaining treatment and other health care issues, and instructions concerning organ donation, disposition of remains and your funeral.
What is a living trust?
It is a written legal document that partially substitutes for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.
Most people name themselves as the trustee in charge of managing their trust's assets. This way, even though your assets have been put into the trust, you can remain in control of your assets during your lifetime. You can also name a successor trustee (a person or an institution) who will manage the trust's assets if you ever become unable or unwilling to do so yourself.
The living trust described in this pamphlet is a revocable living trust (sometimes referred to as a revocable inter vivos trust or a grantor trust). Such a trust may be amended or revoked at any time by the person or persons who created it (commonly known as the trustor(s), grantor(s) or settlor(s)) as long as he, she, or they are still competent.
Your living trust agreement:
•Gives the trustee the legal right to manage and control the assets held in your trust.
•Instructs the trustee to manage the trust's assets for your benefit during your lifetime.
•Names the beneficiaries (persons or charitable organizations) who are to receive your trust's assets when you die.
•Gives guidance and certain powers and authority to the trustee to manage and distribute your trust's assets. The trustee is a fiduciary, which means he or she holds a position of trust and confidence and is subject to strict responsibilities and very high standards.
For example, the trustee cannot use your trust's assets for his or her own personal use or benefit without your explicit permission. Instead, the trustee must hold and use trust assets solely for the benefit of the trust's beneficiaries.
A living trust can be an important part-and in many cases, the most important part-of your estate plan.
What can a living trust do for me?
It can help ensure that your assets will be managed according to your wishes-even if you become unable to manage them yourself.
In setting up your living trust, you may serve as its trustee initially or you may choose someone else to do so. You can name a trustee to take over the trust's management for your benefit if you ever become unable or unwilling to manage it yourself. And at your death, the trustee-similar to the executor of a will-would then gather your assets, pay any debts, claims and taxes, and distribute your assets according to your instructions. Unlike a will, however, this can all be done without court supervision or approval.
Should everyone have a living trust?
No. Young married couples without significant assets and without children, who intend to leave their assets to each other when the first one of them dies do not need a living trust and would not benefit from having a living trust. Other persons who do not have significant assets and have very simple estate plans also do not need a living trust. Finally, anyone who wants court supervision over the administration of his or her estate should not have a living trust. The greater the value of your assets (particularly if you own real estate), the greater the need for a living trust. And having a living trust could be important in the event of an accident or sudden illness.
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Sources: Please Note – Company and or web sites listed below does not imply an endorsed by Mona Miller or Communication Arts Company.
Annuity: http://www.annuity.com/annuity_answers.cfm
Trusts & Wills: The California State Bar web site has great information on wills, trusts and how to find an attorney. http://www.calbar.ca.gov
S&P / S&P 500: Standard & Poor’s web site www.standardandpoors.com
Types of Insurance: Wikipedia http://en.wikipedia.org/wiki/Category:Types_of_insurance
Types of Retirement Plans: Financial Web
http://www.finweb.com/financial-planning/various-types-of-retirement-plans.html
Bonds: SIFMA
http://www.investinginbonds.com/learnmore.asp?catid=2&id=62
Compounding Interest: How do you figure compound interest?
For a quick and easy way to figure out compounding interest here an on-line calculator that does the math for you: http://www.moneychimp.com/calculator/compound_interest_calculator.htm
For those that jus have to do the math ... here is how you calculate Compound Interest.
Formula:
P is the principal (the initial amount you borrow or deposit)
r is the annual rate of interest (percentage)
n is the number of years the amount is deposited or borrowed for.
A is the amount of money accumulated after n years, including interest.
When the interest is compounded once a year:
A = P(1 + r)n
However, if you borrow for 5 years the formula will look like:
A = P(1 + r)5
This formula applies to both money invested and money borrowed.
Frequent Compounding of Interest: What if interest is paid more frequently?
Here are a few examples of the formula:
Annually = P × (1 + r) = (annual compounding)
Quarterly = P (1 + r/4)4 = (quarterly compounding)
Monthly = P (1 + r/12)12 = (monthly compounding)
Go to your experienced and trusted professionals for more information and to see if something is right for your situation.
If you don’t have a professional already, get referrals from people you trust. You can check out certified professionals with your state agencies. Such as, attorney’s with your State Bar, insurance agents and brokers with your state Insurance Commissionaire, etc.
Professionals you may want to have:
- Tax Accountant or CPA
- Estate Planner – Your Tax Account, CPA or an Attorney. Beware of people posing as professional Estate Planners. It has become a popular field in resent years.
- Insurance Agent/Broker
- Financial / Investment Advisor
Attorney for Wills or Trusts
Here are a few explanations of terms we hear all the time but might not really know what they mean or are:
Dow Jones Industrial Average: 30 of the largest and most widely held public companies in the United States created by Charles Dow in 1896.(editor of the WSJ)
Standard & Poor’s (S&P): Standard & Poor’s also known as S&P is the world’s foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. They supply investors with the independent benchmarks they need to feel more confident about their investment and financial decisions.
S&P 500: All of the stocks in the index are those of large publicly held companies and trade on the two largest US stock markets, the New York Stock Exchange and NASDAQ. After the Dow Jones Industrial Average, the S&P 500 is the most widely watched index of large-cap US stocks. It is considered to be a bellwether for the US economy and is a component of the Index of Leading Indicators and some times used as a measure to indicate the overall health of the US stock market.
NASDAQ: The National Association of Securities Dealers Automated Quotations or better known as NASDAQ is an American stock market. It is the largest electronic screen-based equity securities trading market in the United States. With approximately 3,200 companies, it lists more companies and on average trades more shares per day than any other U.S. market
Bull Market: is when buyers consistently outnumber sellers.
Bear Market: is when sellers consistently outnumber buyers.
Recession: A recession is negative economic growth (Gross Domestic Product or GDP) for two or more consecutive quarters in a year.
A prolonged Recession is called an Economic Depression.
"A recession is when your neighbor loses his job; a depression is when you lose your job."
The Market: Two ways to invest:
1) Own - Stocks, Real Estate, Real Assets, Real Estate Investment Trust/REIT’s-(A company dedicated to owning and, in most cases, operating income-producing real estate, such as apartments, shopping centers, and offices), etc
- pros - unlimited upside potential
- cons - you can lose your entire investment
2) Loan - bonds, CD's, notes
- pros -fixed return on investment, if insured you cannot lose your principle
- cons - unless your investment is insured you can lose both your principle and interest. Fixed return on investment no compounding.
Bond - Long-term promissory note for money borrowed by a firm from investors. Here is a partial list of bonds.
•Bearer bond - No record of ownership exists. Possession shows proof of ownership.
•Registered bond - The owner's name is recorded and interest payments are sent directly to the owner.
•Callable bonds - Refers to the ability to pay off a debt obligation prior to its maturity at the option of the issuer of debt.
•Convertible bonds - Debt instruments that can be exchanged for shares of common stock or an equity interest in the company.
•Debentures - Bonds that are not secured by the assets of a firm.
•Mortgage bond - A bond that is secured by a lien against the property of the firm.
•"Zero Coupon" Bonds - A special kind of debt instrument where the interest payments are not made on a regular basis but instead are "accumulated" and paid at the date of bond or debt maturity.
•Municipal bonds - Known as "munis", Municipal bonds are debt obligations issued by states, cities, counties and other governmental entities to raise money to build schools, highways, hospitals and sewer systems, as well as many other projects for the public good. Not all municipal bonds offer income exempt from both federal and state taxes. There is an entirely separate market of municipal issues that are taxable at the federal level, but still offer a state—and often local—tax exemption on interest paid to residents of the state of issuance. Most of this booklet refers to munis which are free of federal taxes
Certificate of Deposit or CD is a time deposit, a financial product commonly offered to consumers by banks, thrift institutions, and credit unions.
Such CDs are similar to savings accounts in that they are insured and thus virtually risk-free; they are "money in the bank" (CDs are insured by the FDIC for banks or by the NCUA for credit unions). They are different from savings accounts in that the CD has a specific, fixed term (often three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.
Using the market:
- Setting realistic goals
- Having realistic expectations
- Clear plan to meet your goals: For Example: How much will I have when I retire? When can I retire? When will I be able to afford my dream home? How much do I need to save per month/year to _________(insert year)? This is why I suggest working with a reputable financial advisor.
Q: How do you find a reputable financial advisor?
A: Ask your tax professional, your estate attorney or someone you consider to be financially savvy for a referral. If still in doubt look them up on NASD.com to find out if they have a clean record.
Abusing the Market:
Day trading: rapid buying and selling often times several times a day the same security in order to "beat" the market. This is done with stocks, bonds and even mutual funds. This is not unlike treating the stock market like you own private Las Vegas. Just like in Las Vegas even the pros get stung.
Why save for retirement? When you put money aside into a pretax retirement plan you are saving money before the IRS gets their cut. This allows your money to grow tax deferred and compound at a much faster rate than if you were paying taxes along the way. In addition, with most pre-tax retirement plans every dollar you put aside is subtracted dollar for dollar from your taxable income up to set contribution limits. This money grows tax deferred until you decide to pull money out at age 59 1/2 or until the IRS Requires you to take a Minimum Distribution at age 70 1/2. (aka RMD)
Types of Retirement Funds:
401K: A section 401(k) plan is a type of tax-qualified deferred compensation plan in which an employee can elect to have the employer contribute a portion of his or her cash wages to the plan on a pre–tax basis. These deferred wages (commonly referred to as elective deferrals) are not subject to income tax withholding at the time of deferral, and they are not reflected on your Form 1040 (PDF) since they were not included in the taxable wages on your Form W-2 (PDF). However, they are included as wages subject to social security, Medicare, and federal unemployment taxes.
The amount that an employee may elect to defer to a 401(k) plan is limited. Therefore, your elective contributions may be limited based on the terms of your 401(k) plan.
Distributions from a 401(k) plan may qualify for optional lump–sum distribution treatment or rollover treatment as long as they meet the respective requirements.
Many 401(k) plans allow employees to make a hardship withdrawal because of immediate and heavy financial needs. Generally, hardship distributions from a 401(k) plan are limited to the amount of the employee's elective deferrals only, and do not include any income earned on the deferred amounts. Hardship distributions are not treated as eligible rollover distributions.
Distributions received before age 59 1/2 are subject to an early distribution penalty of 10% additional tax unless an exception applies..
Roth IRA: A Roth IRA is an Individual Retirement Account that provides tax-free growth. Like a deductible IRA, a Roth IRA gives you the advantage of getting taxed only once, rather than twice (or more) as with a regularly-taxed investment account.
Here is a summary of how it works:
Regularly-Taxed Account -
-You pay income tax, and then make your contribution with post-tax dollars.
-Your principal may be subject to taxes on dividends and capital gains as it grows.
-You pay capital gains tax on your gain at withdrawal.
Deductible IRA –
-You get a tax deduction, essentially letting you deposit pre-tax dollars.
-Your principal grows tax-free.
-You pay income tax on the entire amount of your withdrawal.
Roth IRA –
-You pay income tax, and then make your contribution with post-tax dollars.
-Your principal grows tax-free.
-You pay no further taxes on withdrawal.
SEP IRA: The SEP IRA is a retirement plan designed to benefit self employed individuals and small business owners. Sole proprietorships, S and C corporations, partnerships and LLCs qualify.
SEP IRA contribution limits:
In 2007 a SEP IRA has a contribution limit of $45,000 ($44,000 in 2006). Contributions to a SEP IRA are generally 100% tax deductible and investment earnings in a SEP IRA grow taxed deferred. Withdrawals after age 59 1/2 are taxed as ordinary income. Withdrawals prior to age 59 1/2 may incur a 10% IRS penalty as well as income taxes.
A SEP IRA has broad appeal due to its high annual contribution limits, completely discretionary and flexible annual contributions and minimal administration. SEP IRA plans can be established by a one person business or by a business owner with employees.
-Most frequently a SEP IRA is established by a business owner without employees and is discussed in detail below.
-In special situations a SEP IRA may be an ideal retirement plan for a business owner with employees.
SEP IRA for a self employed business owner without employees: The calculation of how much can be contributed to a SEP IRA is dependent on whether your business is a corporation and you receive a W-2 as compensation or if you are taxed as a sole proprietorship and receive compensation as personal income.
KEOGH Plan: A Keogh plan, sometimes known as a HR10 plan, was designed with the small business owner in mind. First enacted in 1963, this tax deferred retirement savings fund is available for the owner or owners of an unincorporated business and its employees. Since the contributions are deducted from the gross income, one benefit of the plan is a reduction in pre-tax income. Other benefits of the Keogh plan include contributions that are tax deferred until withdrawn, deferred interest income, certain lump sum benefits which are eligible for 10-year averaging, and contribution limits higher than those of IRAs.
As with all retirement savings plans, the Keogh plan has early withdrawal penalties if the participant is more than 5% owner, and payments must begin by April 1 of the year the participant turns 70. Withdrawals from the plan cannot begin until the participant is 59 years of age and retired.
Annuities: An annuity is a contract between you (the purchaser or owner) and an insurance company. In its simplest form, you pay money to an annuity issuer, and the issuer then pays the principal and earnings back to you or to a named beneficiary. Annuities are generally used to provide income in retirement.
The biggest advantage of an annuity is that your money grows tax deferred until you withdraw it. The tradeoff is that if you take your money out before age 59½, you'll usually have to pay a 10 percent early withdrawal penalty to the IRS.
Most life insurance companies sell annuities. You pay the insurance company a sum of money, either all at once or incrementally. The type of annuity you own determines whether your money earns a fixed amount or an amount that depends on the equities in which the annuity is invested. At a designated time chosen by you, known as the maturity date, the insurance company generally begins to send you regular distributions from the annuity's account. Or, you may be able to withdraw the money over time or in one lump sum.
There are many different kinds of annuities. Four of the most common are the following:
•Single premium immediate annuity: You pay the insurance company a lump sum now and begin to receive withdrawal distributions in approximately one month and for a period of time you specify. The amount you receive will vary according to the length of time the payments are to last and whether anyone will receive the remaining balance at your death. Your money grows at a fixed interest rate, set each year by the insurance company.
•Single premium deferred annuity: You pay the insurance company a lump sum now and defer receiving withdrawals until later. The amount of those distributions will depend on the value of your account at the time your payments begin, the length of time the payments are to last, and whether anyone will receive the remaining balance at your death. Your money grows at a fixed interest rate, set each year by the insurance company.
•Annual premium deferred annuity: You send money to the insurance company usually monthly, quarterly, or annually. Your money earns a fixed interest rate, set each year by the insurance company, and you defer your withdrawals to a later date.
•Variable annuity: This type of contract is a vehicle for equity investments. You can do a one-time deposit or contribute throughout the life of the contract. You have choices as to how your money is invested in an offering of mutual funds, and you may invest conservatively or aggressively. The growth of your account value will vary, depending on your choice of investments.
Life Insurance: Of the many different types of life insurance available to consumers, term life insurance is generally regarded as the most inexpensive of the lot. In general, a life insurance policy pays a monetary benefit to the named beneficiary upon the death of the insured. Popular types of insurance include: whole life, variable life, and term life. While part of the premium in a whole life or variable life insurance policy goes into an investment fund, no part of the premium in a term life insurance policy is used for investment purposes. In short, the premiums in a term policy pay for the insurance.
Whole life insurance , or Whole of Life Assurance, refers to a policy that pays a lump sum on death or, in some cases, the earlier diagnosis of a critical illness whenever it occurs provided the contract is kept in force through the required payments being made.
The level of payout can vary from a fixed sum to one that is wholly dependent on investment performance on what remains after mortality costs and other expenses are deducted.
The level of premium payable may be a single, fixed periodic (e.g. monthly), or a periodic payment that may be reviewed subject to the underlying investment performance and sometimes changes in mortality cost.
Some policies will permit a range of flexibility allowing the maximizing of potential payout over a set period (such as ten years). Once this period is over and the insured individual or individuals are older the cover can be continued for an increased premium or the cover reduced (or somewhere in between limits). At any time the target benefit can be set for life. These policies are useful, for example, to those who want increased cover while they have dependent children and then want to reduce cover to last their life. An advantage of this over choosing a term policy and waiting until later to replace it with a Whole Life contract is that the individual is underwritten for life and are not restricted or prevented in future cover should they ever have a serious illness such as cancer.
Term Life policies are by far the cheapest form of insurance--at least in the beginning. For instance, a 30-year-old, non-smoking male, may pay $2,500.00 a year for a whole life policy with a death benefit of $250,000.00. However, the same policy in term form may only cost $300.00 per year. However, the whole life policy premium never increases over the years and also carries a cash build-up which can be used or borrowed at any time. The premiums on the term policy will increase as the insured grows older. For instance, when the 30-year-old male has his 70th birthday, his annual premiums for that same term policy may be $12,000.00 per year, instead of the paltry $300.00 when the policy was first ordered.
Many consumers prefer term insurance to provide their families with the security needed, and then use the additional funds they would have paid into a whole life or variable fund to make investments of their own choosing. Accordingly, they too are acquiring life insurance and using funds for investment purposes (IRA, college fund, second home savings), but they're simply using their funds in a different way, a manner that suits their personal needs.
As with most insurance plans, with a term life plan the insured will still have to undergo a basic physical exam conducted by a nurse (including blood work) to make certain they are insurable. The policy will remain in effect for as long as the premiums are paid. Term policies come in many varieties. However, the most popular models are annual, 7-year, and 10-year policies. Annual term policies carry a premium that increases slightly each year, while 7-year and 10-year term policies carry premiums that remain the same for 7 or 10 year periods at a time.
Disability Insurance: A policy that pays a portion of the insured’s income in the event he or she becomes ill or is injured and can no longer work temporarily or a permanent total disability. Long-term disability insurance is provided with coverage equal to sixty percent (60%) of the gross salary when combined with social security and other benefits.
Liability Insurance: There are different types of liability insurance, including general liability, which works in much the same way as auto liability insurance, but covers businesses. General liability protects a company from third party claims. Aside from general liability, there is also D & O liability, employer liability, and professional liability insurance.
D & O liability stands for "directors and officers" liability and is intended to cover the acts or omissions of those in the director or officer position. An entire company should not be held liable for the statements, actions, failure to act, or other mistakes that are the responsibility of an officer or director.
Employer liability is also known as worker's comp, and it is a mandatory form of liability insurance coverage that all businesses must carry. While it sounds like it is intended to protect the employee, which it does to some degree, it is actually protection for the employer in case of injury, job related illness, or other damages for which the employee might sue the company.
Professional liability is similar to malpractice insurance, although the coverage may not be as comprehensive as some malpractice policies in different fields. The purpose for professional liability insurance is to protect those seen as professionals or "experts" in a given field, who may not be protected by general liability due to their expertise. When one is seen as a professional, he is held to a higher standard and is therefore often considered to hold greater liability towards his clients. Consequently, he needs more coverage than general liability insurance offers.
The simplest definition of liability insurance is insurance which protects a person or entity from claims initiated by another party.
Supplemental Insurance: The purpose of supplemental insurance is simple...it fills the gaps other insurance policies leave open. For example, many employer-provided benefits only provide essential life insurance protection and are not designed to cover all your needs.
If your lifestyle has recently changed and you've had a baby...purchased a new or larger mortgage...or now have children entering college...it's especially important to update your family's financial protection by adding supplemental coverage.
Inflation is another reason you may need supplemental coverage. Over time, inflation can substantially reduce the purchasing power of your insurance dollar.
Short Term Disability: Short term disability coverage provides wage replacement to individuals who experience wage loss due to a disability. STD coverage lasts for up to one year.
Long Term Disability: Provides a reasonable replacement of monthly earnings to insureds that become disabled for extended periods of time due to accident or sickness.
Long Term Care:
-Non acute hospital care, for chronic conditions (eg nursing homes, psychiatric institutions, geriatrics, etc.).
-This insurance pays for chronic health conditions, such as physical incapacity or mental impairment, treated in a setting other than an acute care hospital.
- Insurance that provides financial protection for persons who become unable to care for themselves because of a chronic illness, disability, or cognitive impairment, such as Alzheimer's disease.
Simple interest:
- Interest paid on the principle (initial amount invested) is not added to the principle.
- The interest paid on the amount you invest is paid out to you and not added to the investment/principle.
Example: You invest $1,000 for 10 years at 10% interest annually (yearly). At the end of each year you would be paid $100 interest, the $100 would not be added to the amount invested. At the end of 10 year you would have the original investment of $1,000 plus a total of $1,000 interest paid over 10 years.
Year 1 Investment total: $1,000 Interest earned and paid at end of year 1: $100
Year 2 Investment total: $1,000 Interest earned and paid at end of year 2: $100
Year 3 Investment total: $1,000 Interest earned and paid at end of year 3: $100
Year 4 Investment total: $1,000 Interest earned and paid at end of year 4: $100
Year 5 Investment total: $1,000 Interest earned and paid at end of year 5: $100
Year 6 Investment total: $1,000 Interest earned and paid at end of year 6: $100
Year 7 Investment total: $1,000 Interest earned and paid at end of year 7: $100
Year 8 Investment total: $1,000 Interest earned and paid at end of year 8: $100
Year 9 Investment total: $1,000 Interest earned and paid at end of year 9: $100
Year 10 Investment total: $1,000 Interest earned and paid at end of year 10:$100
After 10 years your $1,000 investment is now worth $1,000.00 and you have $100 of interest paid each year.
Compounding Interest: Here are few explanations …
-Interest that accrues when earnings for a specific period are added to principal; thus interest for the following period is computed on the principal plus accumulated interest.
-A method of interest calculation where, in each period, interest is calculated on both the principal and interest previously accrued.
-When your money makes money and the money you make on your money is making money too. Good when you are investing, not so good when you are paying interest on credit card debt because now you are paying interest on the interest the credit card companies are charging you.
-Compound interest means that each time interest is paid, it is added to or compounded into the principal and thereafter also earns interest.
-When you borrow money from a bank, you pay interest. Interest is really a fee charged for borrowing the money, it is a percentage charged on the principle amount for a period of a year - usually.
-If you want to know how much interest you will earn on your investment or if you want to know how much you will pay above the cost of the principal amount on a loan or mortgage, you will need to understand how compound interest works.
* Compound interest is paid on the original principal and on the accumulated past interest .
For example, a new deposit balance is estimated each day for daily compounding. Common compounding periods are daily, monthly, quarterly, annually and continuously. The more frequent the compounding, the higher the effective rate of interest.
Example for Compound Interest on a annual basis:
Year 1 Investment total: $1,000 Interest earned at end of year 1: $100
Year 2 Investment total: $1,100 (initial investment plus interest eared) interest earned at end of year 2: $110
Year 3 Investment total: $1,210 Interested earned at end of year 3: $121
Year 4 Investment total: $1,331 Interested earned at end of year 4: $133.10
Year 5 Investment total: $1,464.10 Interested earned at end of year 5: $146.41
Year 6 Investment total: $1,610.51 Interested earned at end of year 6: $161.05
Year 7 Investment total: $1,771.56 Interested earned at end of year 7: $213.16
Year 8 Investment total: $1,948.72 Interested earned at end of year 8: $177.16
Year 9 Investment total: $2,143.59 Interested earned at end of year 9: $194.87
Year 10 Investment total: $2357.95 Interested earned at end of year 10: $214.36
After 10 years your initial investment of $1,000 would be worth $2,593.74
Want to do the math yourself … see formula under Sources at the end of this document.
Estate Planning: Estate planning is a process. It involves people—your family, other individuals and, in many cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. And it addresses your future needs in case you ever become unable to care for yourself.
Through estate planning, you can determine:
•How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
•When and under what circumstances it makes sense to distribute your assets during your lifetime.
•How and to whom your assets will be distributed after your death.
•How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.
Many people mistakenly think that estate planning only involves the writing of a will. Estate planning, however, can also involve financial, tax, medical and business planning. A will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.
Who needs estate planning?
You do—whether your estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself.
If your estate is small, you may simply focus on who will receive your assets after your death, and who should manage your estate, pay your last debts and handle the distribution of your assets.
If your estate is large, your lawyer will also discuss various ways of preserving your assets for your beneficiaries and of reducing or postponing the amount of estate tax which otherwise might be payable after your death.
If you fail to plan ahead, a judge will simply appoint someone to handle your assets and personal care. And your assets will be distributed to your heirs according to a set of rules known as intestate succession.
Contrary to popular myth, everything does not automatically go to the state if you die without a will. Your relatives, no matter how remote, and, in some cases, the relatives of your spouse will have priority in inheritance ahead of the state.
Still, they may not be your choice of heirs; an estate plan gives you much greater control over who will inherit your assets after your death.
Trust – why do we need them: What is a revocable living trust?
It is a legal document that can, in some cases, partially substitute for a will. With a revocable living trust (also known as a revocable inter vivos trust or grantor trust), your assets are put into the trust, administered for your benefit during your lifetime and transferred to your beneficiaries when you die—all without the need for court involvement.
Most people name themselves as the trustee in charge of managing their living trust’s assets. By naming yourself as trustee, you can remain in control of the assets during your lifetime. In addition, you can revoke or change any terms of the trust at any time as long as you are still competent. (The terms of the trust become irrevocable when you die.)
In your trust agreement, you will also name a successor trustee (a person or institution) who will take over as the trustee and manage the trust’s assets if you should ever become unable to do so. Your successor trustee would also take over the management and distribution of your assets when you die.
A living trust does not, however, remove all need for a will. Generally, you would still need a will—known as a pour over will—to cover any assets that have not been transferred to the trust.
You should consult with a qualified estate planning lawyer to assist you in the preparation of a living trust, your will and other estate planning documents. Also, keep in mind that your choice of trustees is extremely important. That trustee’s management of your living trust assets will not be automatically subject to direct court supervision.
Who should be my executor or trustee?
That is your decision. You could name your spouse or domestic partner as your executor or trustee. Or you might choose an adult child, another relative, a family friend, a business associate or a professional fiduciary such as a bank. Your executor or trustee does not need any special training. What is most important is that your chosen executor or trustee is organized, prudent, responsible and honest.
While the executor of a will is subject to direct court supervision and the trustee of a living trust is not, they serve almost identical functions. Both are responsible for ensuring that your written instructions are followed.
One difference is that the trustee of your living trust may assume responsibilities under the trust agreement while you are still living (if you ever become unable or unwilling to continue serving as trustee yourself).
Discuss your choice of an executor or trustee with your estate planning lawyer. There are many issues to consider. For example, will the appointment of one of your adult children hurt his or her relationship with any other siblings? What conflicts of interest would be created if you name a business associate or partner as your executor or trustee? And will the person named as executor or successor trustee have the time, organizational ability and experience to do the job effectively?
When does estate planning involve tax planning?
Estate taxes are imposed upon estates that have a net value of $2 million or more. That amount will increase to $3.5 million in 2009. In 2010, the estate tax will disappear completely.
Then, unless Congress passes an extension, the exemption will revert back to $1 million in 2011. For estates that approach or exceed these amounts, significant estate taxes can be saved by proper estate planning, usually before your death or, for couples, before one of you dies.
Keep in mind that tax laws often change. And estate planning for tax purposes must take into account not only estate taxes, but also income, capital gains, gift, property and generation-skipping taxes as well. Qualified legal advice about taxes and current tax law should be obtained from a competent lawyer during the estate planning process.
Does the way in which I hold title make a difference?
Yes. The nature of your assets and how you hold title to those assets is a critical factor in the estate planning process. Before you take title (or change title) to an asset, you should understand the tax and other consequences of any proposed change. Your estate planning lawyer will be able to advise you.
•Community property and separate property. If you are married or a registered domestic partner, assets earned by either you or your spouse or domestic partner while married or in the partnership and while a resident of California are community property. (Note: Earned income in domestic partnerships, however, may not be treated as community property for federal income tax purposes.)
As a married individual or registered domestic partner, you may continue to own certain separate property as well—property which you owned prior to the marriage or domestic partnership. A gift or inheritance received during the marriage or partnership would be considered separate property as well.
Separate property can be converted to community property (and vice versa) by a written agreement (it must conform with California law) signed by both spouses.
However, taking such a step can have significant tax and other consequences. Make sure that you understand such consequences before making any such change.
•Tenants-in-common. If you own property as tenants in common and one co-tenant (co-owner) dies, that co-tenant’s interest in the property would pass to the beneficiary named in his or her will. This would apply to co-tenants who are married or in a domestic partnership as well as to those who are single.
•Joint tenancy with right of survivorship. Co-owners (married or not) of a property can also hold title as joint tenants with right of survivorship. If one tenant were to die in such a situation, the property would simply pass to the surviving joint tenant without being affected by the deceased person’s will. .
•Community property with right of survivorship. If you are married or in a registered domestic partnership, you and your spouse or partner could also hold title to property as community property with right of survivorship.
Then, if your spouse or domestic partner were to die, the property would pass to you without being affected by the deceased person’s will.
Married couples and registered domestic partners also have the option of jointly holding title to property as community property. In such a situation, if one spouse or partner were to die, his or her interest would be distributed according to the instructions in his or her will.
Who should help me with my estate planning documents? •Can I do it myself? Yes. It is possible for a person to do his or her own estate planning with forms or books obtained at a stationery store or bookstore or from the State Bar. At the very least, a review of such forms can be helpful in preparing you for estate planning. If you review such materials and have any unanswered questions, however, you should seek professional help.
•Do I need a professional’s help? It depends. If you do seek advice, keep in mind that wills and trusts are legal documents that should only be prepared by a qualified lawyer. Many other professionals and business representatives, however, may become involved in the estate planning process. For example, certified public accountants, life insurance salespersons, bank trust officers, financial planners, personnel managers and pension consultants often participate in the estate planning process. Within their areas of expertise, these professionals can assist you in planning your estate.
The State Bar urges you, however, to seek advice only from professionals who are qualified to give estate planning advice. Many professionals must be licensed by the state.
Ask the professional about his or her qualifications. And ask yourself whether the advisor might have an underlying financial incentive to sell you a particular investment, such as an annuity or life insurance policy. Such a financial incentive could bias that professional’s advice.
Unfortunately, some sellers of dubious financial products gain the confidence and private financial information of their victims by posing as providers of estate or trust planning services.
Will – why do we need them: A will is a traditional legal document which:
•Names individuals (or charitable organizations) who will receive your assets after your death, either by outright gift or in a trust.
•Nominates an executor who will be appointed and supervised by the probate court to manage your estate; pay your debts, expenses and taxes; and distribute your estate according to the instructions in your will.
•Nominates guardians for your minor children.
Most assets in your name alone at your death will be subject to your will. Some exceptions include securities accounts and bank accounts that have designated beneficiaries, life insurance policies, IRAs and other tax-deferred retirement plans, and some annuities.
Such assets would pass directly to the beneficiaries and would not be included in your will.
In addition, certain co-owned assets would pass directly to the surviving co-owner regardless of any instructions in your will. And assets that have been transferred to a revocable living trust would be distributed through the trust—not your will.
What Does a Will Do?
A will is a legal document, drafted and executed in accordance with state law, which becomes irrevocable at your death. In your will, you can name:
•Your beneficiaries. These are family members, friends, a domestic partner, or charitable organizations who will receive your assets as you direct. You may provide for specific gifts of such items as jewelry or a specific sum of money to named beneficiaries. You should also provide for the distribution of the residue of your estate - that is, your remaining assets (they do not need to be specified) which are not specifically given to individuals or organizations in your will.
•A guardian for your minor children. You may nominate a person who will have the responsibility to care for your child if you and your spouse die before the child attains 18 years of age. You may also name a guardian - who may or may not be the same person - to be responsible for management of assets given to a minor child, until the child attains 18 years of age.
•An executor. This person or institution of your choice, named in your will and appointed by the probate court, collects and manages your assets, pays your debts and expenses and any taxes that might be due, and then, in a manner approved by the court, distributes your assets to your beneficiaries in accordance with the provisions of your will. Your executor plays a very important role with significant responsibilities.
It can be a time-consuming job. You should choose your executor carefully. A will is a part of your “estate plan.”
Does a Will Cover Everything I Own?
No. Generally speaking, your will affects only those assets which are in your name alone at your death. Some assets which are not affected by your will include:
•Life insurance. The cash proceeds from an insurance policy on your life are paid to whomever you have designated as beneficiary of the policy in a form filed with the insurance company Ñ no matter who the beneficiaries under your will may be.
•Retirement plans. Assets held in retirement plans, such as a 401(k) or an IRA, are transferred to whomever you have named as beneficiary in the plan documents.
•Assets owned as a joint tenant. Assets such as real estate, automobiles, bank accounts and other property held in joint tenancy will pass to the surviving joint tenant upon your death, not in accordance with any directions in your will.
•“Transfer on death” or “pay on death.” Securities and brokerage accounts may be registered or held with beneficiaries named on the security or account. Title is held in the name of the owner and the names of the beneficiaries are preceded by the words “transfer on death” or “TOD.” Other assets, such as bank accounts and U.S. savings bonds, may be held in a similar form using the owner’s name and the beneficiaries’ names preceded by the words “paid on death” or “POD.”
•“Community property with right of survivorship.” Married couples or registered domestic partners may hold title to their community property in their names as “community property with right of survivorship.” Property held in that manner at the death of the first spouse or domestic partner is not affected by that spouse’s will, but passes instead to the surviving spouse or domestic partner.
•Living trusts. Assets held in a revocable living trust at your death are distributed pursuant to the provisions of that trust document. A living trust allows for the management of your assets during your lifetime and the transfer of those assets pursuant to the terms of the trust without a court-supervised probate proceeding. The State Bar has published a pamphlet entitled Do I Need a Living Trust? which provides more detailed information about living trusts. (See #1 for information on ordering pamphlets.)
•Your spouse’s or domestic partner’s half of community property. In California, any assets acquired by you and your spouse or registered domestic partner from earnings during your marriage or domestic partnership are community property.
You and your spouse or registered domestic partner own equal shares of those assets. Your will, therefore, affects only your half of the community property, not your spouse’s or domestic partner’s.
Assets that either of you owned at the date of the marriage or registered domestic partnership, together with gifts and inheritances given to just one of you during the marriage or domestic partnership, are that individual’s separate property. Your will affects all of your separate property held in your name alone.
Even if your entire estate consists of property held in joint tenancy, a life insurance policy and a retirement plan, you should still consider making a will.
If the other joint tenant dies before you do, then the property held in joint tenancy will be in your name alone and subject to your will. If named beneficiaries die before you do, the assets subject to a beneficiary designation may be payable to your estate.
You may unexpectedly be entitled to a bonus, a prize, a refund, or may receive an unexpected inheritance which would then be subject to your will as well. If you have minor children, the nomination of a guardian of their person and estate is a very important reason for making a will.
What Happens If I Don't Have a Will?
If you die without a will (also referred to as intestate), state law will determine the beneficiaries of your estate. Contrary to popular myth, if you die without a will, everything does not automatically go to the state.
If you are married or have established a registered domestic partnership, your spouse or domestic partner will receive all of your community property. Your spouse or domestic partner also will receive part of your separate property, and the rest of your separate property will be distributed to your children or grandchildren, parents, sisters, brothers, nieces, nephews or other close relatives.
If you are not married or in a registered domestic partnership, your assets will be distributed to your children or grandchildren, if you have any - or to your parents, sisters, brothers, nieces, nephews or other relatives.
If your spouse or domestic partner died before you, his or her relatives may also be entitled to some or all of your estate. Friends, a non-registered domestic partner or your favorite charities will receive nothing if you die without a will.
Who Should Know About My Will?
Other than the lawyer who writes a will for you, no one needs to know what your will says. But the location of your original will should be known by your executor and other close friends or relatives.
Your will should be kept in a safe place such as your safe deposit box, your lawyer’s safe, or a locked, fireproof box at your residence.
What Other Planning Should I Do?
•List of assets and debts. Making a list of your assets and keeping it in a place known to your executor or other family members is of great help to them when you are not able to share that information with them. List your bank accounts, safe deposit boxes, stocks and bonds, real estate, and other assets. Also list the names and addresses of anyone to whom you owe money.
•Durable power of attorney for property management. In this document, you appoint another individual (the attorney-in-fact) to make property management decisions on your behalf if you are incapacitated. The attorney-in-fact manages your assets and must do so in a prudent manner accountable to you and solely in your best interests.
•Advance health care directive / durable power of attorney for health care. This document allows the person named as attorney-in-fact to make health care decisions for you when you can no longer make them for yourself. It may also contain statements of wishes concerning such matters as life sustaining treatment and other health care issues, and instructions concerning organ donation, disposition of remains and your funeral.
What is a living trust?
It is a written legal document that partially substitutes for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.
Most people name themselves as the trustee in charge of managing their trust's assets. This way, even though your assets have been put into the trust, you can remain in control of your assets during your lifetime. You can also name a successor trustee (a person or an institution) who will manage the trust's assets if you ever become unable or unwilling to do so yourself.
The living trust described in this pamphlet is a revocable living trust (sometimes referred to as a revocable inter vivos trust or a grantor trust). Such a trust may be amended or revoked at any time by the person or persons who created it (commonly known as the trustor(s), grantor(s) or settlor(s)) as long as he, she, or they are still competent.
Your living trust agreement:
•Gives the trustee the legal right to manage and control the assets held in your trust.
•Instructs the trustee to manage the trust's assets for your benefit during your lifetime.
•Names the beneficiaries (persons or charitable organizations) who are to receive your trust's assets when you die.
•Gives guidance and certain powers and authority to the trustee to manage and distribute your trust's assets. The trustee is a fiduciary, which means he or she holds a position of trust and confidence and is subject to strict responsibilities and very high standards.
For example, the trustee cannot use your trust's assets for his or her own personal use or benefit without your explicit permission. Instead, the trustee must hold and use trust assets solely for the benefit of the trust's beneficiaries.
A living trust can be an important part-and in many cases, the most important part-of your estate plan.
What can a living trust do for me?
It can help ensure that your assets will be managed according to your wishes-even if you become unable to manage them yourself.
In setting up your living trust, you may serve as its trustee initially or you may choose someone else to do so. You can name a trustee to take over the trust's management for your benefit if you ever become unable or unwilling to manage it yourself. And at your death, the trustee-similar to the executor of a will-would then gather your assets, pay any debts, claims and taxes, and distribute your assets according to your instructions. Unlike a will, however, this can all be done without court supervision or approval.
Should everyone have a living trust?
No. Young married couples without significant assets and without children, who intend to leave their assets to each other when the first one of them dies do not need a living trust and would not benefit from having a living trust. Other persons who do not have significant assets and have very simple estate plans also do not need a living trust. Finally, anyone who wants court supervision over the administration of his or her estate should not have a living trust. The greater the value of your assets (particularly if you own real estate), the greater the need for a living trust. And having a living trust could be important in the event of an accident or sudden illness.
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Sources: Please Note – Company and or web sites listed below does not imply an endorsed by Mona Miller or Communication Arts Company.
Annuity: http://www.annuity.com/annuity_answers.cfm
Trusts & Wills: The California State Bar web site has great information on wills, trusts and how to find an attorney. http://www.calbar.ca.gov
S&P / S&P 500: Standard & Poor’s web site www.standardandpoors.com
Types of Insurance: Wikipedia http://en.wikipedia.org/wiki/Category:Types_of_insurance
Types of Retirement Plans: Financial Web
http://www.finweb.com/financial-planning/various-types-of-retirement-plans.html
Bonds: SIFMA
http://www.investinginbonds.com/learnmore.asp?catid=2&id=62
Compounding Interest: How do you figure compound interest?
For a quick and easy way to figure out compounding interest here an on-line calculator that does the math for you: http://www.moneychimp.com/calculator/compound_interest_calculator.htm
For those that jus have to do the math ... here is how you calculate Compound Interest.
Formula:
P is the principal (the initial amount you borrow or deposit)
r is the annual rate of interest (percentage)
n is the number of years the amount is deposited or borrowed for.
A is the amount of money accumulated after n years, including interest.
When the interest is compounded once a year:
A = P(1 + r)n
However, if you borrow for 5 years the formula will look like:
A = P(1 + r)5
This formula applies to both money invested and money borrowed.
Frequent Compounding of Interest: What if interest is paid more frequently?
Here are a few examples of the formula:
Annually = P × (1 + r) = (annual compounding)
Quarterly = P (1 + r/4)4 = (quarterly compounding)
Monthly = P (1 + r/12)12 = (monthly compounding)
Calendar
